Market Tumble, Recovery Took Corporate Pensions on $37 Billion Ride

Last week’s tumultuous market – in which major indices endured one day of freefall before enjoying two days of recovery – took corporate pensions on a wild ride. Aon Hewitt recently assigned dollar values to those swings.

The S&P 500 companies started off the week with a collective pension-funding deficit of roughly $425 billion, an improvement of about $29 billion from a year earlier, according to employee benefits adviser Aon Hewitt.

But, as the Dow Jones Industrial Average tumbled more than a thousand points on Monday, Aug. 24, that deficit widened by $13 billion to $438 billion, the largest such gap since February.

When the market rebounded on Tuesday and Wednesday, pension plans gained back $37 billion.

“Things calmed down and reversed to the point where pension plans were actually a little better off by the end of the week than the beginning,” said Joe McDonald, an Aon Hewitt senior partner.